The Cost of Capture

I'm just back from a trip to India. Until fairly recently, I would never have imagined significant opportunity for document capture in the very place where outsourcing of data entry has been most successful. That's relevant to the document capture business because when a document is "captured" two things happen:

- the paper document is digitized (usually scanned, but sometimes an already electronic document is converted to a standard format), and

- data is extracted from the document - either manually or using OCR - so the document can be filed, and sometimes to populate a line-of-business application.

Call it what you will - indexing, verification, keying - it is a data entry requirement that allows a document that has been digitized to be sent to locations around the world where labor is less expensive. It is exactly in this type of work that India has excelled. A vast, trained workforce has taken on the tedious task of manually extracting information from documents. Even compared to "automated," OCR-assisted data entry that requires relatively expensive labor in North America or Europe, a very competitive alternative has been to take advantage of the much lower-cost labor pool in India (and other countries) to manually enter data, without the help of automation at all.

So why was I in India? To some extent, you can say that the success and breadth of outsourcing initiatives over the last 20 years have changed the underlying economics. Although labor continues to significantly less expensive in markets such as India, China, Philippines - the usual suspects - costs have gone up substantially. They have gone up enough that it is no longer a given that throwing more manpower at a problem, such as manual data entry, is going to be less expensive than investing in automation technologies to help assist in the effort. Many organizations are coming to the same conclusion.

Even banks with far-flung operations and massive workforces are exploring ways to automate aspects of the document capture process: the volumes of documents to be captured are staggering once a bank wades into the world of branch capture. (My thoughts on how branch capture is technically something new in document capture: http://ibm.co/13i74bl.) Automation not only reduces costs, but speeds up the process, ultimately helping improve customer services… and most importantly, customer satisfaction. (And if you are skeptical that customer satisfaction is the underlying benefit of document capture, let me try to convince you: http://ibm.co/10bwmsJ.)

Put another way, in large-scale document capture operations, there is a premium on reducing complexity, including the number of people involved. Globally, the Holy Grail is to grow the number of documents being captured, while meeting that growing need with existing staff.

From my perspective, document capture has come of age when it is being adopted globally, even in markets traditionally noted for the low cost of labor.

To continue the conversation, connect with me on Twitter @captureguru.